HHJ Baddeley. Four stepchildren intervene successfully in financial remedies case in respect of four farming properties.

The judgment disposes of an application made by four children (‘the children’) to intervene in financial remedies proceedings between their father (‘H’) and their step-mother (‘W’).

Background

• The family carried on a farming business.
• The application concerns four properties:
1. Border View Farm;
2. Dunstan Farm;
3. Heavygate Road; and
4. Smugglers.
• The intervenors’ case was that they are each entitled to a one-sixth share in each of the properties, either (i) by virtue of the properties being partnership properties; or (ii) by the doctrine of proprietary estoppel.
• It was common ground that all six parties to this application were equal partners in the farming business, as confirmed by the partnership deed dated 26 February 2020.
• H supported the intervenors’ application. W accepted that the intervenors are all equal one-sixth partners in the farming business but, in essence, argued that the properties did not constitute partnership assets.

Issues

Partnership properties

Whether, or not, each property was defined as a partnership asset turned on the construction of the partnership agreement. Regrettably, the agreement was poorly drafted. The court found that the key clauses of the agreement could not be reconciled and did not assist to determine the issue of what constituted partnership property.

It was necessary for the court to look at extraneous evidence to determine the meaning which the partnership agreement would convey to a reasonable person, having all the background knowledge which would reasonably have been available to the parties at the time of entering the contract (Yafai v Muthana [2012] EWCA Civ 289).

Balancing the available information, the court found that there was a common understanding that (i) all land and buildings at Border View Farm was partnership property; and (ii) Dunstan Farm was, too, understood to be partnership property.

Proprietary estoppel

After rehearsing the legal principles to be applied in a proprietary estoppel claims, the court concluded that the elements for a successful claim were made out in respect of Border View Farm and Dunstan Farm, but not Heavygate Road or Smugglers.

Conclusions

In short, the remedy would be the same under either head of claim. The proportionate outcome would be for the four intervenors to get what they had been promised: equal shares in Border View Farm and Dunstan Farm; neither H nor W had made sufficiently clear promises in respect of the other two properties to sustain a successful claim.